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Technical analysis of Bitcoin price; The emergence of an ascending twin bottom pattern

Technical analysis of Bitcoin price;  The emergence of an ascending twin bottom pattern

September is historically not a good month for Bitcoin, and the king of digital currencies has performed poorly this month in past years. But some analysts believe that this year may be different. Currently, a pattern similar to a double bottom has appeared on the Bitcoin chart in the 3-day time frame. If the price of BTC can cross the $25,000 level; This pattern will be complete.

This article is just a translation of the source news and is not in any way a recommendation to buy, sell or invest in the cryptocurrency market.

According to Mihan Blockchain and quoted by Coin Telegraph, such a bullish prediction follows the possibility of pattern formation Twin floors In the long-term time frames, it is mentioned in the Bitcoin chart. The double floor pattern is a classic bullish pattern and due to the presence of two price floors in this pattern and the trend change, it resembles the letter W.

Twin floor pattern
A view of the twin floor pattern

Bitcoin’s price drop below $20,000 in July followed by an increase in price to around $25,000 and then a drop to $20,000 in August is partly a pattern scenario. The floor confirms the twins. To complete this pattern, the price of Bitcoin must rise to $25,000.

If Bitcoin’s W-shaped trend is completed, we may see another price jump that sometimes follows the formation of a double bottom pattern.

The purpose of the double bottom pattern is achieved by measuring the distance between the peak of the pattern (the neck line) and the price floor and adding the obtained number to the break point of the neck line. Regarding Bitcoin, as it is clear from the figure below, if this bullish pattern is completed, we will probably see a 50% increase in the price of this currency.

Double bottom pattern in Bitcoin chart
Double bottom pattern in Bitcoin chart – 3-day time frame Source: Trading View

However, it should be noted that the double bottom pattern fails 21.45% of the time.

Extreme fear has reigned in the market again

Bullish return scenario Price Bitcoin It has been raised in the midst of the decline in the value of various assets in the global financial markets.

Last week, Federal Reserve Chairman Jerome Powell announced the Fed’s strict stance against inflation in his speech at the Jackson Hole conference. Powell’s words caused the price of Bitcoin to drop to $20,000 and the fear and greed index of this currency once again entered the “extreme fear” range.

Despite Bitcoin’s fear and greed index re-entering extreme fear territory, Flip Swift, the founder of the analytical website LookIntoBitcoin, believes that the market sentiment is as strong as in June, when it saw high selling pressure due to the bankruptcy of various companies such as Three Arrows Capital. Capital) and also the collapse of stablecoin Terra; It is not negative.

He stated in this regard:

The fear and greed index is not as scary as when we saw it decrease to number 6. This index is now at number 23. At that time, there was a lot of panic in the market, but now we have entered a period of indifference and people are tired of the bear market and are more interested in their summer holidays or their living expenses.

Noting that Bitcoin buyers are in an uphill battle, Glassnod wrote in his weekly report:

Apparently, investors are eager to simply “get their money back” or liquidate a large portion of their holdings around their purchase price.

Recently, Ecoinometrics tweeted about the accumulation of whales who hold between 1,000 and 10,000 bitcoins; Cited. According to the platform’s data, these whales have accumulated a lot of Bitcoin during recent Bitcoin fluctuations around $20,000.

Nick, the analyst of the Ecoinometrics website, says in this regard:

In this bear market, you can either buy Bitcoin with a dollar cost averaging strategy or buy at a price floor and wait.

A dollar cost averaging strategy is similar to a staggered purchase strategy in which equal amounts of money are allocated to the purchase of an asset at different time intervals.

  • What are the conditions for the formation of the Bitcoin double bottom pattern?

Currently, 2 price floors have been registered at the same level for Bitcoin. To complete this pattern, Bitcoin must be able to break the neckline around $25,000. In this case, we can see the price increase up to 30,000 dollars.

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